The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Roth IRA contribution or IRA contrib?||Date: 12/14/1999 4:49 PM|
|Author: ptheland||Number: 23091 of 123001|
A followup question is whether I can convert back and forth between regular non-deductible IRA to Roth-IRA accounts as my AGI permits in a given year. By doing so:
a. Is there any advantage?
b. any loss in conversion
c. hastles in the process?
I think you may not have heard that once you open a particular type of IRA (deductible, non-deductible, Roth), you can keep that IRA going, regardless of your future income. For example, if you put money into a Roth last year, but this year your income is too high to put money into a Roth, you can still keep your old Roth in place. You just can't add more contributions to it during a year your income is over the limits. Same for deductible and non-deductible traditional IRA's. So anyone could have all three types in place at once. There is no requirement to convert existing funds from one type to another.
To answer your questions more directly: a) sometimes there is an advantage in converting a traditional IRA